So it is not as bad as just the comparison of 105 and 268 would indicate, I do not believe."

Mr. DONNELLY. Let me put it this way: It may be bad, but not that bad.

General PICK. That is right.

Mr. DONNELLY. I have here your figures. On Garrison, the difference between the authorization estimate based on the survey report and fiscal year 1952 is $163 million. Now, of that increase, price changes account for $123,650,000; authorized project extensions, $19,562,000; difference due to changed needs, $1,220,000; structural and engineering modifications, $674,000; and then the big one from the standpoint of planning, inadequacy, $17,894,000.

General, I have talked with the gentlemen in your planning branch and they have defined for the committee "inadequacies" as omissions in engineering planning. Is that correct, Mr. Slichter, or would you want to add to that definition?

Mr. SLICHTER. I did not write that definition.

Mr. BEARD. That is part of it. I think there was more to it, as I recall it.

Mr. DONNELLY. I cannot put my finger on it. Wait a minute; maybe I can. I have it here now.

This is the document written by the Corps of Engineers on June 20,

1950:

Inadequacy of original estimates: Under this heading will be placed any items of cost increase which were plainly due to inadequacy in the first estimate. These are items which were omitted but should have been included by the estimator as distinguished from those which could not have been foreseen. Also in this category will be placed differences due to estimates made during emergency conditions, during the depression period, or during the war.

General PICK. Mr. Donnelly, that is a tremendously big project. Many things have happened up there to increase the estimates. For instance, there is the problem with the acquisition of the Indian lands. That pool comes around and follows right along one of the railroads up there, and it takes the elevator on one side of the track, and that takes all the means of the people in the town of keeping the town there.

Congress has provided that we could buy out the town and pay the people for it. There have been lots of things to increase the cost that you could not possibly have foreseen, because it required action of Congress.

Mr. DONNELLY. General, I concede that. That is why I read off the detailed breakdown.

General PICK. So I have no objection to anything you have said there. We are just discussing this thing.

Mr. DONNELLY. That is right.

General PICK. Yes.

Mr. DONNELLY. Let us take that category.

General PICK. For instance, when we started cutting the first tunnels through there, when we got in about 100 feet we had a stream of water coming in there. We had to go in. You could not possibly foresee that. Although we had drilled the place, we did not happen to hit this place. We had to go in and cut out the whole side of the hill to keep the water from coming in. All those things you cannot foresee.

Mr. DONNELLY. But that does not affect this $17,894,000. The word "inadequacy" is the key. In the definition of "inadequacy" it was conceded that unforeseen conditions are not in that category. General PICK. That is about 6 percent of the estimate now.

Mr. DONNELLY. It is 17 percent of the authorization estimate. The survey report on which Congress authorized this project is 17 percent off because of omissions in engineering estimates. That is $17,894,000.

Mr. FORD. You can take this off the record or have it included, but is it entirely fair and accurate to consider 17 percent of the original authorization, or 17 percent of the estimated cost at the present time? I think that may be another way of putting it which might be as fair or even more equitable than 17 percent of the original estimate.

NEED FOR BETTER COST ESTIMATES FOR CONSIDERATION BY APPROPRIATIONS COMMITTEE

Mr. DONNELLY. Congressman, the corps and the committee investigators did this: They took all the 182 projects and agreed upon a weighted average for authorization estimates and then they worked up the figures showing the increase due to five categories.

I am using the 17 percent at the time of the authorization estimate to demonstrate that the survey report upon which the authorization was based was not a sound basis for this committee to consider the appropriation of first construction money. The definite project report, which is a formal document, is a sound basis, but the Corps of Engineers does not want to complete the definite project report until the project is almost completed, until construction is almost complete. There is a complete hiatus, a complete gap here, where this committee has no sound basis whatever to get the total cost of projects when it decides to initiate the construction. That is the point.

General PICK. Mr. Donnelly, this committee handles other public works. Are we remiss in the information we furnish the committee as compared to the information being furnished the committee by other construction agencies of the Government? I am very much interested in what you say. I think that the committee is entitled to information.

Mr. DONNELLY. I understand your position, General. You want to give the committee the best information that you can from an engineering standpoint.

General PICK. That is right.

Mr. DONNELLY. Because the reputation of the Corps of Engineers, the finest body of engineers in the world, is at stake in each of these projects.

General PICK. I would love to give the committee exactly what they want. I get the feeling that we are giving the committee, Mr. Chairman, less than somebody else. We should not do that. We should give the committee what they want. We should give the committee the best information possible. We should help the committee get the best information possible.

Mr. DONNELLY. That is what we are interested in.

General PICK. I do not see that there is any question about that, Mr. Chairman. That is just an honest statement of fact.

GARRISON PROJECT (continued)

Mr. DONNELLY. But yet we find, General, that the corps has not been giving this committee accurate information in many cases. Let me quote just a few lines from the testimony on this project in April of this year. This is by Colonel Potter:

Referring to the indicated costs on the chart, which were $158 million in 1946, $177 million in 1947, $188 million in 1948, $202 million in 1949, and $206 million in 1950

Then Judge McGrath says this:

Judge MCGRATH. Has not this resulted in giving the Congress, then, in prior years a distorted view of benefit-cost ratio to the money to be expended?

Colonel POTTER. Yes, sir; it has; and the reason is bad judgment, Judge. Our judgment was not substantiated by conditions.

General PICK. Colonel Potter was talking. He made a statement there that he did not thoroughly understand what he was saying, I do not believe.

When this project was authorized, Mr. Donnelly, the Congress was not told that it would average a cost ratio of 1 to 1.5. I wrote the report myself. I think if you will get it you will find that I said in there that the project is economically justified. The project is economically justified now, even at the cost of $268 million for Garrison on a 1 to 1.5 basis. In other words, for every dollar you spend the benefits will be $1.50.

Mr. DONNELLY. To be fair with the General, your representatives formerly reported it as 1.2. That was in April of this year. Fort Randall was 1.5.

General PICK. I thought you read that. The whole Missouri Basin, as I remember it, is 1.6

Mr. DONNELLY. But that 1.6, General, under your figures, will drop to 1.3 if Gavins Point is not constructed.

General PICK. Well

Mr. DONNELLY. I can get the figures.

General PICK. Why consider dropping Gavins Point when you have to build it?

Mr. DONNELLY. That is the point, General. This committee is the body which will decide whether or not to build Gavins Point.

I pointed out to you that before April of this year your district office had made a supplemental definite project report in which they said that the cost of Gavins Point was $11 million more than the cost reported by Colonel Potter or by the corps to this very committee in April of this year. My whole premise is that the corps, recognizing your own position, wants to give the committee better information; and we should devise some way where it will be assured.

Mr. SLICHTER. That district report was submitted to us as you indicated. It was returned, however, for additional examination of certain features, I think you will find, in the interest of economy. Our position is, Why should we introduce another inexact figure at the time when the design of the project has not been completely established?

General PICK. It is wrong, I think, Mr. Chairman, to take a project like the Missouri Basin and those big projects in the Upper Missouri Basin and try to figure out a cost-benefit ratio based upon the analysis

of an individual structure in a chain like that. I do not think that anybody can get any intelligent figures on that.

In other words, you could not say that after you get through this would be the benefit of this project if you did not build any of the others.

It is planned to have the power developed along the line all tied together, so it is practically one project in many of those multiplepurpose uses. I do not think that it is proper to try to just figure out a cost ratio for one of those when you are bound to consider them all as a unit.

Mr. Donnelly, I am very honest. I do not see how you are going to ever overcome some of the deficiencies which you have been pointing out here. I just do not know how to do it.

For instance, we come in here and we tell the committee it is going to cost so much to build an air base out here.

Mr. KERR. The only way to overcome a deficiency is to just stop the project and let it die; is that it?

General PICK. That is right.

Mr. KERR. That is the only way to get away from it.

General PICK. I go out, and we make an estimate. We make the best estimate we can. It costs more. Now, then, that is absolutely true of civil practice. The railroads, the manufacturers, the insurance companies all find that when they build a big project it costs more than their initial estimates.

Mr. DONNELLY. General, we will have to suspend for a few minutes. (Thereupon a short recess was taken.)

Mr. DONNELLY. May we resume, Mr. Chairman?

Mr. KERR. Yes; go ahead.

COST INCREASE OF 124 PERCENT IN CIVIL WORKS CONSTRUCTION

PROGRAM

Mr. DONNELLY. These are the figures, gentlemen, that show the story for the whole construction program, if I may give them to you; and this is the basis for all the money that has been appropriated for the last few years.

(The table entitled "Analysis by the Corps of Engineers of cost estimates for 182 Civil Works projects comprising fiscal year 1951 program," is as follows:)